Law of Diminishing Returns need to be considered if profitable safety is to be achieved

At the start of 2015 all the States and Territories, with the exception of Western Australia and Victoria, have adopted the model Workplace Health and Safety Act. This new legislation is in many ways a restatement of the previous OHS risk management obligations. While this is true, the model WHS Act has at the same time refocused private and public sector organisations to actively think through their approach to workplace health and safety. What is new is the view that the extended leadership team has a very clear set of WHS obligations, as defined in the duties set against the new term “person conducting a business or undertaking” (PCBU).

All tiers of leaders in the organisation, from the Board to the Executive, to Senior Management, through to the frontline supervisor, must clearly demonstrate how they have eliminated, as far as reasonably practicable workplace health and safety risks. Where this is not possible they must show how they have minimised the risks through applying the same standard. The duty to manage risk as far as reasonably practicable stretches to include the work environment, maintenance of plant and structures, provision of adequate facilities, handling and storage of plant, structures and substances, provision of information, training and supervision and health monitoring.

The leaders also have to show how they have exercised due diligence in ensuring their duties and obligations as defined under the Act are met. This means leaders must play an active role in acquiring and keeping up to date with WHS knowledge, have a thorough understanding of the operations and associated risks, ensure there are adequate resources and process to eliminate or minimise health and safety risks and that adequate processes are in place for dealing with information and other obligations within the Act.
 
The challenge in responding to the recent changes in the WHS legislation and regulation is not to revert to earnestly doing more of the same and somehow expecting a different safety outcome. If we rely on a “single approach” we are in danger of falling into the classic economic trap of the Law of Diminishing Returns. Where increasing the investment in one area, after a certain point is reached, the rate of improvement or return will not progress or even diminish if the other variables remain constant.
Frank Guldenmund from the Safety Science Group at the Delft University of Technology in the Netherlands, argues that if an organisation is going to sustainably improve it’s safety performance it must pay attention to structure, culture and processes, as well as the dynamic relationship that exists between the three. He goes onto argue that within the dynamic context of these three elements safety behaviours are formed and expressed. The Law of Diminishing returns can be avoided if structure, culture and processes form part of a well articulated, integrated, resourced and executed strategic plan.
Here are a few thoughts worth exploring against each of the three elements.

1. Structure is the formal framework that describes how work will be efficiently and effectively undertaken and by whom and the role leadership plays. In particular the division of authority, accountability and responsibility within the workforce.

            A couple of structural questions to consider:

1. Does your organisation have a clear accountability and responsibility framework, which leaders understand and operationally embrace?
2. In your organisation is the structural undertaking appropriately resourced?
3. Can leaders in your organisation effectively and consistently demonstrate transformational and transactional leadership capabilities?

1. Culture is the shared values and basic assumptions that influence and shape the way an organisation operates and behaves. It can be likened to the layers of onion, where the perceptions form the outer layers, commonly referred to as climate, and the core is where the deep culture values, assumptions and artefacts reside.

            A couple of cultural questions to consider:

1. Does your organisation have a well-defined culture maturity model in place that maps the end goal and the steps required to get there?
2. Is there a mechanism in place for your organisation to measure your organisation’s safety climate?
3. Are your leaders trained in how to build genuine workforce and contractor safety engagement and empowerment?

1. Processes make up the management system and are in part the means by which an organisation uses to realise defined objectives.

            A couple of process questions to consider:

1. How does your organisation deal with the inevitable gap between the way work is imagined and the way work is actually done? Is this observed performance variability valued or constrained and under what circumstances?
2. How do your leaders and the architects of your management system determine that the processes are moving the organisation closer to the end state and are perceived by those who use them to be adding value?
3. Do you processes promote both “protective safety”, those activities, which reduce incidents and injuries, and “productive safety”, those activities that focus on what is being done right and making sure this is replicated?

If safety is truly going to be profitable then all three elements need to be in the gaze of leaders and the workforce and growing trust needs to be nurtured.
A study undertaken by Safe Work Australia estimated that “the total cost of work-related injuries and illnesses for the 2008-09 financial year … to be $60.6 billion dollars, representing 4.8 per cent of GDP for the 2008-09 financial year.” (Safe Work Australia March 2012, The Cost of Work-Related Injury and illness for Australian employers, Workers and the Community: 2008-09)
While Deloitte Access Economics in a report, released at the end of 2014, “Get Out of Your Own Way Unleashing Productivity” estimated a staggering $249 billion dollars is spent every in Australia on compliance related activities, or another way of describing that amount 16% of last year’s GDP. The most sobering figure is that $155 billion dollars is directly attributed not to government red tape but to organisations following self imposed rules.
If careful consideration is not given to structure, culture and processes not only will behaviour remain unchanged but also the worrying costs associated with harm and spiralling self-imposed compliance will continue to erode the national and organisations’ social and financial bottom line. 

About Generative HSE

Generative HSE is one of Australia’s leading providers of safety and risk solutions providing a range of innovative, evidence-based WHS consultancy, training and facilitation services. Our work results in visible, sustainable improvements to safety and risk performance, as well as increased productivity, quality and profitability.